COMPLAINTS ABOUT DISTRICT GOVERNORS ISSUING SME FUNDS TO RELATIVES

Fri, 2011-03-11 07:17

Altogether MNT100 billion is to be spent this year on helping small and medium entrepreneurs set up business, so that jobs are created and family incomes increase. Every district will receive MNT50 million of this and every province MNT800 million, to be used to guarantee loans, or as a sort of collateral. The Government is also planning to guarantee SME loans issued without collateral.

Is the Government sure this will be a wise move? MNT50 million is on average half the annual budget of a district and local officials could very well be tempted to use this security of a collateral to grant loans to projects economically not viable. Complaints have already started coming in that some district governors in Khovd, Bayan-Ulgii and Arkhangai provinces have issued loans from the Small Business Development Fund to their immediate family and other relatives. Unless care is taken, this will nullify the purpose of the program.

Source: Zuunii Medee

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